Alibaba unveils big cloud price cuts on AI rivalry

The Chinese internet pioneer slashed prices on scores of internet-based products and services by as much as 55%, and by 20% on average. — Bloomberg

Beijing: Alibaba Group Holding Ltd is rolling out its second major cost cuts for cloud services in years, aiming to win back users from rivals like Tencent Holdings Ltd competing to provide the tools critical to training artificial intelligence (AI).

The Chinese internet pioneer slashed prices starting yesterday on scores of internet-based products and services by as much as 55%, and by 20% on average.

The discounts span more than 100 product specifications, including data storage and elastic computing products that provide online processing power to clients, Alibaba executives said during a briefing.

The cuts mark one of the more aggressive moves by Alibaba to regain leadership from Tencent and Baidu Inc in the cloud business, which is essential in the development of generative AI.

The price cuts come after Alibaba called off a spin-off and initial public offering for the formerly fast-growing unit.

It’s now focusing on growing the public cloud – the domestic services arm aimed at enterprise customers – given US sanctions curtailing the supply of advanced chips to Chinese firms. Chief executive officer Eddie Wu has taken direct control of the unit and revamped major lines.

Alibaba has struggled over the past year to revamp its vast eCommerce, logistics and cloud empire in the face of fierce competition and geopolitical risks.

The company announced cuts from 15%-50% for core products of the Alibaba Cloud in April last year, in a move aimed at capitalising on the demand for raw computing power needed for AI models such as Alibaba’s own Tongyi Qianwen.

“We see tremendous growth prospects of China’s digital market,” Liu Weiguang, president of the unit’s public cloud segment, said in the statement.

“That’s why we decided to launch the price reduction campaign to lower the threshold of cloud services for more enterprises and developers to reap the technological dividends and accelerate the adoption of advanced public cloud services across various industries in China.” — Bloomberg